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Oil climbs on hopes for OPEC output cut deal

Published 2016-11-21, 10:11 a/m
© Reuters.  Oil rises more than 2% on expectations for OPEC output cut deal
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Investing.com - Oil prices climbed on Tuesday, as market sentiment was boosted by growing expectations that major oil producers will come to a deal to rein in output at a meeting next week.

U.S. crude oil was up $1.34 or 2.87% at $47.66 a barrel at 0950 ET.

Global benchmark Brent futures were at $48.13 as barrel, up $1.27 or 2.69%.

Oil prices were boosted following reports that the energy ministers from Iraq and Iran were backing a proposed OPEC output cut aimed at curbing oversupply that has pressured prices lower for over two years.

The Organization of the Petroleum Exporting Countries is to meet on November 30 to decide on strategy for the first half of next year.

But many market analysts remain skeptical of the potential deal, amid uncertainty over how any agreement would be implemented.

OPEC reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day at a meeting in September.

But production by OPEC members hit a record high in October of 33.64 million barrels per day.

Reaching an agreement on a deal to cut output has proved problematic, with some producers, most notably Iran, reluctant to curb production.

Iran has ramped up production in a bid to regain market share after international sanctions against it were lifted last January.

Analysts also warned of potential volatility in the oil market this week, with trading volumes expected to be lower ahead of the U.S. Thanksgiving holiday on Thursday and Friday.

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